Both US dollar and gold prices continued their steady upward creep on the black market for a sixth consecutive day on Feb. 17, following the State Bank of Vietnam's 9.3 percent devaluation of the dong.

Currency dealers on forex trading streets like Ha Trung and Tran Nhan Tong were trading the dollar at 22,000 VND, up 300 VND over the previous day and 1,000 VND from Feb. 14.

This black market price was 1,000-1,100 VND per dollar higher than rates quoted at commercial banks, which on Feb. 17 hovered at around 20,790-20,890 VND. However, this is an improvement over earlier gaps between the commercial and black market rates. Since November, the latter has frequently been about 10 percent higher than the bank price.

"I don't know what the State really aims to do but since they devalued the dong last week, the dollar has kept going up sharply. My dong are evaporating," said Do Hai, a dealer at a Ha Trung forex shop.

In principle, last week's devaluation was designed to bring the official rate closer to market rate and to narrow the widening trade deficit. State Bank Governor Nguyen Van Giau, immediately after the devaluation, affirmed that commercial banks had plentiful supplies of dollars.

But current happenings on market have been confusing the public, with many people concerned about the weakening dong and trying to seek a safe haven in US dollars as well as in gold.

Major gold dealers in Hanoi and HCM City, including Sai Gon Jewellery Co, Sacombank Jewellery Co, Bao Tin Minh Chau, Agribank Jewellery Co and Phu Nhuan Jewellery Co (PNJ), on Feb. 17 quoted buy/sell prices of 36.93-37.07 million VND (1,678-1,685 USD) per tael, up 250,000 VND per tael from Feb. 16. (One tael is equivalent to 1.2 ounces.)

Gold shops reported that demand for gold leaf in small quantities was increasing quickly. Sacombank and PNJ, for example, reported selling 2,000-6,000 taels of gold leaf per day, up nearly 50 percent over January's level.

"The response is understandable and predictable after the devaluation. It is obviously natural response by people to protect their assets," a senior official of the Central Institute for Economic Manangement (CIEM) commented to Vietnam News on Feb. 17 by phone, on condition that his name be withheld.

He suggested that the devaluation would have a positive impact on the economy, but urged the Government to launch a public relations campaign to stabilise public sentiment.

Meanwhile, Agribank Jewellery Co representative Nguyen Huu Dang predicted to Vietnam News: "The US dollar will hover around this point for the short term, then follow an uptrend in a zigzag fashion, since confidence in the dong has not been fully restored." /.